Friday, June 17, 2022

Copyright Recapture: How to (Legally) Break Your Publishing Contract


How to Get Back Your Copyright After 35 Years

Siegel Reclaims Copyright
1941 Superman "Breaking Chains" Trademark
The term or duration clause of most publishing and entertainment related contracts is for the life of the copyright. In today's terms, that's an author's life plus 70 years. However, life of copyright contracts (with important exceptions) are unenforceable in all 50 states. That is because federal law takes precedence over state laws.

The 35 Year Termination Rule

To protect artists, authors, and compos of post-1977 works from bad deals signed by their younger selves, the Copyright Act gives them (and certain family members) a mulligan - a second opportunity to negotiate better terms or exit from an undesirable deal.

Embedded in the copyright statute is Section 203 – a powerful reset button, which returns terminated rights to an author or their family if timely exercised. Termination can be accomplished "at any time during a period of five years beginning at the end of 35 years from the date of publication of the work under the grant or at the end of forty years from the date of execution of the grant, whichever is earlier."

Section 203 applies to grants of copyrights made by authors on or after January 1, 1978, rather than grants made by their heirs. This could include transfers of works created before 1978 if the transfer was made after January 1, 1978. For example, a film option signed by Stephen King in 1994 for the novel Carrie, written in 1974, could be terminated sometime between 2029 and 2034.

Works for hire are immune to termination.
However, the concept of work for hire is complicated. Therefore, just because a contract says a work was commissioned on a work for hire basis or created in the course of employment, does not make it so. Additionally, the termination right does not apply to foreign grants. 
 
In the United Kingdom, however, under narrowly prescribed circumstances, 25 years after the death of an author, rights revert to the author's estate. In Canada, 25 years after the death of an author, under a broader scope of circumstances, rights automatically revert to the author's estate. Here is a link to an excellent article by Professor Rebecca Giblin about reversion, and allied, rights outside the U.S.

They Don't Make It Easy

If you wish to terminate a rights agreement, a notice of termination must be signed, served, and recorded with the Copyright Office. In other words, t
he process for reclaiming copyrights is not automatic. 
 
The Copyright Act gives the termination rights holder the option, but not the obligation, to reclaim their copyrights. As a result, much to the joy of publishers, the vast majority of termination rights expire without being exercised.  
It is your responsibility to calculate the termination date. It can be anytime during a five-year window beginning the earlier of (a) thirty-five years from the date of first publication or (b) forty years from the date of execution. A notice of termination may be served ten years before the effective termination date or as late as two years before. A missed deadline or improperly drafted notice is a fatal mistake.


Example: Andrea signed a contract for her first novel on September 26, 1989. The book was published on September 26, 1992. The termination window is September 26, 2024, to September 26, 2029. The earliest Andrea (or her surviving family members) may serve the notice of termination is September 26, 2014, ten years before the earliest possible termination date. The latest Andrea (or her surviving family members) may serve notice is September 2027, two years before the latest possible termination date.

Andrea must serve the notice on her publisher, or publisher's successor, fill out the appropriate paperwork and record the notice of termination with the Copyright Office. This public record becomes part of the work's chain of title, establishing legal ownership. If anyone were to review the Copyright Office's database, Andrea's name and termination notice would appear in the title chain.

Derivative Works Exception

Under what's known as the "derivative works exception," a derivative work produced before termination may continue to be exploited under the terms of the license agreement. For example, a motion picture adaption of Andrea's novel can continue to be streamed post-termination, subject to the studio's duty to account to Andrea. With the proviso, the studio may not create new derivative works covered by the terminated grant of rights.

Joint Works

In the case of joint works created after 1977, a majority of the coauthors must sign the termination notice.  
 
The 56 Year Termination Rule

For works published before January 1, 1978, the maximum term of protection for certain works was 56 years. Over time, Congress increased the term of copyright protection from 56 to 75 years. In 1998 Congress increased the term again by 20 years for a total of 95 years. Congress also created a new right of termination for pre-1978 grants, licenses and assignments. 
 
For these older works, the Act provides a five-year termination window beginning 56 years after a work was first published or registered for copyright. To terminate, the author, or their surviving spouse and children, must serve and record the termination notice within the time limits specified by the Copyright Act. If not terminated, the agreement will continue for the duration of the agreement. Unlike post-1977 grants, licenses and assignments, pre-1978 grants, licenses and assignments made by an author's widow, children, and other statutory beneficiaries, are terminable.

Case & Comment. In 1938 Jerry Siegel and Joe Schuster, two young men from Cleveland, Ohio, signed over all of their rights to the Superman character to DC Comics for $130.00 and vague promises of future work. To address this and similar economic injustices, Congress gave authors a second chance to strike better financial deals. As a result, in 1999, using Section 302 of the Copyright Act, Siegel's heirs recaptured his rights to the Superman character. Unlike authors of joint works created after January 1, 1978, each author of a pre-1978 joint work work may serve a notice of termination on their own behalf and recapture their share of the copyright.

Fortunately, you don't have to be related to a man of steel to reclaim copyrights. The heirs of Hank Williams, William Saroyan, Truman Capote, Joe Young, Lorenz Hart, and many others have availed themselves of these valuable rights.

Tell Your Heirs to Beware  
 
As part of your estate planning, advise your statutory successors of your right to terminate. If you do not survive to exercise termination, that right is distributed to your family members as a statutory class. They may exercise this powerful right despite any agreement to the contrary. While copyright termination rights are kryptonite to copyright contracts, read on how this right can unintentionally be waived (given up).

Hoping they will catch family members off guard, publishers and motion picture studios may make offers to sweeten existing contract terms after an author dies.

Before signing an agreement that revokes and re-grants rights, family members should carefully review the document and consult with a termination rights attorney. If asked to sign during the period termination could be effected, they may be waiving their right to terminate.

If that later agreement revokes a publishing agreement, or film option, in exchange for a new agreement, the new agreement should be a significantly better deal than the previous grant. If not, they've lost the opportunity to renegotiate the terms of the agreement.

Conclusion

Call us if you are thinking about exercising your termination rights or need assistance renegotiating your entertainment or publishing agreement. Fees will depend upon the complexity of the matter and the number of works being terminated. We can help you: (i) identify which copyrights are eligible for termination; (ii) determine who is the proper party to exercise those termination rights; (iii) prepare and record the notice of termination; (iv) help you renegotiate your existing contract; or (v) work with your trusts and estates attorney on reopening an estate, or seeking copyright damages that flow from a determination of ownership or co-ownership of a recaptured copyright.

NOTICE: This article discusses general legal issues of interest and is not designed to give any specific legal advice pertaining to any specific circumstances. It is important that professional legal advice be obtained before acting upon any of the information contained in this article.

LLOYD J. JASSIN is a New York publishing and entertainment attorney with a special interest in copyright and trademark matters. He is co-author of The Copyright Permission and Libel Handbook: A Step-by-Step Guide for Writers, Editors and Publishers (John Wiley & Sons). He is former adjunct professor at the NYU School of Professional Studies were he taught a course on digital rights. He has written extensively on negotiating contracts in the publishing and entertainment industries and has been quoted extensively in publications such as the New York Times, Publishers Weekly and Columbia Journalism Review. He may reached at Jassin@copylaw.com or at (212) 354-4442. His offices are located at 1501 Broadway, Floor 12, New York, NY 10036.

(c) 2011 - 2022. Lloyd J. Jassin 
 

 
Trademark Registration Superman Breaking Chains
1941 Superman Breaking Chains Trademark Registration